What it is
MRR is the monthly expression of recurring subscription value. Under a consistent policy it should equal ARR ÷ 12. Operating reviews often use MRR; boards usually frame growth in ARR.
How it’s calculated
Sum monthly recurring fees for active customers at period end, applying the same inclusion rules as ARR. New, expansion, contraction, and churn movements should map 1:1 to the ARR waterfall when annualized.
Where it breaks
MRR breaks when month-end “active” differs from the ARR schedule, when annual prepay is booked as a single MRR spike, or when sales quotes use list MRR that never matches billing.
In the board pack
Use MRR for month-over-month ops reviews; present ARR (and the waterfall) for board-level annual framing. Do not show both without stating they share one definition.